BBRY: Q10 Sales Trail Z10 in UK, Canada, Says Pac Crest

By Tiernan Ray

He’s at it again: Pacific Crest‘s James Faucette, who has an Underperform rating on BlackBerry (BBRY) shares, and who has been skeptical about the company’s roll-out of its new smartphones based on its “BB10” operating system, the Z10 and the Q10, today argues that the Q10, which is currently on sale for pre-order in the U.S., will “fall flat” given what he argues are weakening trends in overseas markets, where the device has been on sale for some weeks.

BlackBerry shares today closed up 9 cents, or 0.7%, at $13.63, apparently as rumors circulated that activist investor Dan Loeb of Third Point has taken a substantial stake in the company.

The Q10 just went on sale today at AT&T‘s (T) Web site for pre-order for the U.S. market, and is expected to become available at Verizon Communications‘s (VZ) Verizon Wireless stores next Monday, June 10th, Verizon said this afternoon.

Faucette says “checks” of sales in the U.K. and Canada show Q10 sales falling to a level of about 10,000 units or so per week in each country, below what he models as having been as much as 35,000 units per week for the Z10 at its debut in February:

Our checks in the United Kingdom and Canada indicate that sales of the Q10 continue to run well below the bar set by the Z10. We believe that before the Q10 launched, general expectations were for equivalent or slightly stronger demand based on the Qwerty keyboard. However, we have consistently found Q10 sales volumes in both the United Kingdom and Canada to be half or less compared to Z10 sales after equivalent periods of time. While there may be several explanations for this, in our view, it appears that the Z10 simply sated the majority of BB10 demand prior to the Q10’s launch after faithful BlackBerry users were forced to wait a long time for the new platform to be released.

Faucette offers the following graphic of what he projects to be total BB10-based handset sales in the U.K., Canada, and U.S. since February (click for larger image):

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There are 157 comments

JUNE 5, 2013 5:49 P.M.

screw pacific crushed! wrote:

what a bunch of crooks!
telling lies on one day of sale of a new divice?
go find something to screeeeeew yourself with! faucet!

JUNE 5, 2013 5:50 P.M.

kris wrote:

LOL this is turning in to a Saturday night live show. blackberry has reported last quarter's sales already on the record. and author should have calculated those against this graph. good work, appreciated.

JUNE 5, 2013 5:55 P.M.

Qback wrote:

Ru kidding me ? This moron still has a job ?

JUNE 5, 2013 5:56 P.M.

Brian wrote:

Faucette has absolutely ZERO credibility...this is such a joke and I cannot believe anyone would listen to this misguided fool regardless of their position in the stock.

JUNE 5, 2013 5:56 P.M.

Qback wrote:

C'mon man, give it up already.

JUNE 5, 2013 5:58 P.M.

James King wrote:

You know.... they "always" slam this company! It wouldn't matter "what" happened! They always find a way to bash BBRY! You have to wonder who they are calling for the information they throw out there. Can you say "short position"? PAAAAALEEEEEEEEZZZZZ!!!!

JUNE 5, 2013 6:00 P.M.

russel oliver wrote:

James you ignorant worm, we know your working for the hedge fund managers who shorted the stock.
Your propaganda is tring to force the stock down so your cronies can make thier money back.You are transparent and are not to be listened to.

JUNE 5, 2013 6:01 P.M.

Brian wrote:

This guy is a Joke! He is in the shorts pockets...its so obvious at this stage. His analysis if you can call it that has zero credibility.

JUNE 5, 2013 6:01 P.M.

James King wrote:

So? You gonna post my comment or what?

JUNE 5, 2013 6:03 P.M.

pedro wrote:

BlackBerry is dead.

JUNE 5, 2013 6:04 P.M.

Guestuser wrote:

Tiernan Ray, please do us a favor by not posting anything from PC James F .... Thanks a bunch....

JUNE 5, 2013 6:06 P.M.

Small investor wrote:

What do you say? He must have a file full of responses? "He’s at it again" says it all!

JUNE 5, 2013 6:07 P.M.

lool wrote:

I lol'd so hard reading this....

JUNE 5, 2013 6:08 P.M.

Chippy55 wrote:

Faucette looks kinda nonhetero in my opinion.

JUNE 5, 2013 6:08 P.M.

Realist wrote:

James Faucette has zero credibility & will be raising his sale estimates YET AGAIN very soon.

At that time he will likely claim that Q10 returns are actually higher than sales?

Easy to see this is another attempt to sling poop for the Short Interest...Easy to see who pays Faucette's salary. He has no other choice at this point since he has lost all credibility and is forever destined to be a paid shill. It is proven that he lies, go look at his releases on sales estimates from last earnings report...reduced weeks before and raised right before, that's either willful manipulation or he is an idiot. I say both :)

Simply put, James Faucette is the Short Interest's PR guy...so easy to see. They will all burn one day very soon :)

JUNE 5, 2013 6:11 P.M.

UTMINER wrote:

Wow, this guy is at it again....never fails. he has zero creditability. He should be required to disclose any position in this stock and whether he is being paid by a third party for this garbage.

JUNE 5, 2013 6:12 P.M.

Anonymous wrote:

C'mon Blackberry, file a suit vs Pac Crest and Faucette already, muzzle this liar who is caught in a hopeless short position.

JUNE 5, 2013 6:12 P.M.

malcolm wrote:

Can you stop a jackass from braying??.He is prostituting himself out and singing for his supper.He has no morals,principles or scruples.

JUNE 5, 2013 6:17 P.M.

A Pull wrote:

So, according to this graph, BBRY has sold through a total of (approx) 700,000 BB10 phones since January In NA and the UK even though Heins said they sold through 700k in January alone.

JUNE 5, 2013 6:18 P.M.

danby wrote:

To pass judgement on a phone that has just today hit the US market is low even for you
James Faucette.
The hedge funds that your working for who shorted this stock are in for a rude awakening.
Can you say Short Squeeze. Buy BB @ BBRY dont let the scum bags make their money back.

JUNE 5, 2013 6:19 P.M.

Anonymous wrote:

This guy is destroying significant shareholder value and harming the brand with his constant barrage of lies. This is the new Detwiler.

JUNE 5, 2013 6:20 P.M.

rob wrote:

Faucette should get a job writing for "Reality" TV shows.

JUNE 5, 2013 6:21 P.M.

Corel wrote:

PacificCrest are the crooks of the century. They have people on Wall Street who asked favors.
PacCrest is one of the finest bashing company ever exists.
Take your articles and feed the monkeys with them.

Are you kidding, Tiernan??? Why do you publish this crap when a 3rd grader could shoot holes in it?

Fact 1: Z10 was only available in UK and Canada for full month of February, and in handful of other countries like UAE, India, Saudi Arabia, etc for a week or so Qprior to Q4 ending Mar 2, so vast majority of sales that month were indeed from UK and Canada. Safe to say 75% sales that month came from these two countries.

Fact 2: BBRY reported 1M BB10 units shipped for that one month period, with estimated 70% sell through. Most of these had to be in UK and Canada. Say 750,000.

The graph Pacific Crest provided to itself (how reliable!) indicates only about 240,000 units sold for first five weeks thru Mar 4...off by about the same 300% that their modeling proved to be when they 'modeled' only 300,000 BB10 units shipped that period.

Applying the same 3x multiplier to the entire graph implies a minimum 1M units in the US and another 750K in Canada/UK for Q1. Considering these three countries comprise only about 1/3 of BBRY sales worldwide, I'd say a target of 5.25M units to be announced June 28 should be about right, and result in EPS of nearly $1.00 for Q1.

Your refusal to fact check each time you post an article continues to erode your already dubious credibility ..clearly outshone only by your desperation to cover your hopeless short position

JUNE 5, 2013 6:26 P.M.

OnTheBalance wrote:

Following shortly from Pac Crest / Leaky Faucette will be his channel checks on Q10 sales all completed June 4th; Creative Journalism at its finest. A proud moment for all American investors. As the SEC gently sleeps..

JUNE 5, 2013 6:28 P.M.

Anonymous wrote:

Tiernan,
BBRY management announced today that 60% of Fortune 500 companies are either testing/using BB10 devices (an indisputable fact) while you chose to report lies from a crook!!! Do you have any vested interest in this???

JUNE 5, 2013 6:29 P.M.

kurt windibank wrote:

Tiernan,

This is getting comical now.

The Q10 is selling very well in Canada and the UK as reported by carriers,retail stores and others with DATA behind their checks.

Does fuacette have insight into enterprise sales?

He us a joke and has a history of timing his comments whenever BlackBerry gets positive news..why? Because he is short...and sweating bullets.

Hope he gets smoked in the squeeze!!

JUNE 5, 2013 6:31 P.M.

Anonymous wrote:

The Blackberry z10 was launched with the popularity of a 82 year old ugly whore suffering last stage leprosy. Amazingly the Blackberry q10 is even worse than the z10.

JUNE 5, 2013 6:32 P.M.

Derek wrote:

James Faucette, what's wrong with you?

JUNE 5, 2013 6:32 P.M.

enough already wrote:

By Barron's posting this trash makes me think that nothing written by Tierman Ray or Barrons can be trusted. Just another falsified Blog site and no longer a reputable new agency.

The chart when added up shows about 750,000 total units sold in all three countries for two fiscal quarters. What? Even a 5 year could see through that.

Total sales of 750,000 when they reported 1,000,000 Z10's n the first quarter alone and before the release into the US? Now the Q10 is out in the UK and Canada + alot more countries. And what happened to the single client order of 1,000,000 in March?

These type of reports written on Barrons are becoming the norm.

JUNE 5, 2013 6:33 P.M.

OnTheBalance wrote:

Hilarious times and anything but a proud moment for investors in America. Formal SEC complaints have been filed against the Shorts manipulation and use of lies and disinformation through "analysts - ahem" with respect to this stock and others. The SEC continues to nap. Bastion of the free world's major markets. Or is the US turning into another banana republic?

JUNE 5, 2013 6:35 P.M.

Anonymous wrote:

Rim trolls had been crying short squeeze since the Sun caught fire. I say it's time for the long tumble since the Rimm stock more than doubled from $6.22 last year. It's a long way down for BBRY ahead.

JUNE 5, 2013 6:41 P.M.

Dingleberry TardPhone wrote:

Those savages who bought only a million BB10 phones are not going to tell USA to buy no inferior outdated BB10 phones. Who in their right mind would buy these BB10 junk instead of the Samsung Galaxy S4 and HTC One? Are Indonesians and South Africans telling the USA what to do now? Go home back to Canada where you come from, Blackberry!

JUNE 5, 2013 6:45 P.M.

Anon wrote:

What's RIM/RIMM?? They're called BlackBerry now. Sounds like you've been working with old data.

JUNE 5, 2013 6:50 P.M.

Smart Investor wrote:

Everyone knows Pacific Crest‘s James Faucette is a crook and has zero credibility. All his analysis/channel check is not true from historical verification. We should report to BBRY PR department. Tiernan Ray only help James Faucette in reporting false information. Whereas BBRY management announced today that 60% of Fortune 500 companies are either testing/using BB10 devices (an indisputable fact) was never mentioned in his report. This is very clear as to what their motive are..

JUNE 5, 2013 6:51 P.M.

dd wrote:

pac crest full of it!

JUNE 5, 2013 6:52 P.M.

Harvard wrote:

His graph does not correctly show the last quarter sales levels, from the last conference call. He is under-reporting already announced sales by a factor of five. One can only conclude that he is either grossly negligent and did not update his estimates to reflect real sales levels, or is attempting to convey misleading information by selective reporting? To what end, I am uncertain, but this must certainly put his credibility at stake. It certainly appears to me to be an incompetent analysis.

JUNE 5, 2013 6:57 P.M.

liar wrote:

Faucet is an idiot. Sad that people like him have a job

JUNE 5, 2013 6:59 P.M.

Roy_Munson wrote:

In the words of Axl Rose: "You think anyone with an IQ over 15 is gonna believe your $h!t f&@khead"

JUNE 5, 2013 7:01 P.M.

Anonymous wrote:

"TardPhone" Only buy Samsung Galaxy S4 and HTC One?? What about Apple? Oh yeah, Apple lost the patent infringement battle with Samsung so they can only sell iPhone4s and 5 in the USA.

JUNE 5, 2013 7:02 P.M.

kurt windibank wrote:

Tiernan,

Can you ask fuacette to explain his graph as the numbers do not add up to reported Q4 numbers.

If you are going to insist on printing his numbers he should be held accountable to them.

On another note...hus desperation is becoming so palpable that I know of two bears who are covering stating that it's obvious how desperate he and others on the shirt side have become.

Pretty bad when the bears are laughing too.

JUNE 5, 2013 7:03 P.M.

Anonymous wrote:

I see the Dingleberry fans are hurt by Faucette's comment again. It only hurts more when the comment was true. Dingleberry fans are a very small insignificant voice now, what? only about 0.7% US smartphone sales are BB Dingleberrys? Could be less, time would tell.

JUNE 5, 2013 7:06 P.M.

Neil wrote:

He's just another short seller who's REALLY worried about BBRY reporting earnings this month.....gonna enjoy watching these guys pay the price for their sheepish speculations!

JUNE 5, 2013 7:09 P.M.

Wendell wrote:

I absolutely love my HTC One!! It blows the doors off of the dingleberry z10 by a country mile! Why does Blackberry even both trying to compete with HTC? Blackberry makes amateur useless junk can't ever compete with HTC!

"... BlackBerry has the third world locked up, and the overall switch in phone users from mobile phones to smart phones has just begun." (Mentions 5x as many cell phone users as there are smart phone users so far.)

"I don't think the US matters; I think it's a rounding error. And I think the shorts are concentrating on that because they want to get the stock price down."

on the shorts: "Maybe they should write proper English if they're trying to make a really convincing sell report."

"It appears that the new CEO of BlackBerry by all accounts is top-notch. They have a top CEO... great technology."

LoL Tiernan Ray, I think you must be smiling while looking at these comments, seems like you are enjoying this BS, knowingly and this is why you have been posting this non sense but, you know what, it is sad and immature.

JUNE 5, 2013 7:12 P.M.

Jethro wrote:

I would give BBRY two days to get out of America. This turd maker is not welcome here.

JUNE 5, 2013 7:16 P.M.

Getting a cut wrote:

Tiernan, does James Faucetter share some of the bribe he gets from shorties so you publish his junk in Barrons?

JUNE 5, 2013 7:16 P.M.

ToFaucette wrote:

Faucette, you are a moron of nth degree, hard to believe some company is still paying this idiot to write this drivel and some investors are listening to him for advice. Go fu*k yourself.

JUNE 5, 2013 7:18 P.M.

Allnightlong wrote:

To Tiernan Ray:
All we need to know is whether Pacifc Crest is short the stock. We know this guy is mentally challenged and obviously is not interested in actual facts but fictious ones. If they are short why even publish this Faucette guy`s comments. He has proven in the past to be wrong and he will do so in the future. Why provide him an audience. If he has valid comments, fair ball but to date what he has said has proven to be almost eroneous. He belongs somewhere where the sun doesn`t shine but having said that people like this who obviously have an agenda should not have an audience. In baseball three strikes and you are out! How many does he get? Ten, twenty unlimited.?

JUNE 5, 2013 7:19 P.M.

Anonymous wrote:

BlackBerry management is a joke. Tear touting q10, what a joke. Rim hired these execs from failed smartphone manufacturers. They only brought incompetence in. CEO decision to hire Alicia Keyes, another joke. What is she doing for the company? I'm not holding my breath to wait for people to buy blackberry because she has one. They laid off good technical talent to bring her on. Stupid decision. Oh, by the way, your z10 is resets frequently when getting 4g signal. If they didn't let go the quality staff, maybe they would've caught these issues. I like my z10 but not enough to keep it due to the resets. Blackberry is a dying brand and luckily I sold my shares and will be returning the z10. Time to take short position in BlackBerry and watch it crash and burn as deserved by their decisions. I have to say I agree with Mr. Faucette.

JUNE 5, 2013 7:21 P.M.

Anonymous wrote:

And YOU are at it again: repeating unsubstantiated claimed by James Falsette

JUNE 5, 2013 7:32 P.M.

Anon wrote:

What resets?? I've had a Z10 for almost 3 months and it has never reset.

JUNE 5, 2013 7:32 P.M.

CamH wrote:

@ anonymous who posted at 7:19
You sound like a bitter exemployee or related to one in some way. Take your short position. I will enjoy taking your money...again

JUNE 5, 2013 7:34 P.M.

Garo wrote:

Tiernan Ray and Pacific Crest‘s James Faucette. Man, you guys are funny.
This time I was laughing so hard I was unable to finish the article.
Thanx.

JUNE 5, 2013 7:47 P.M.

What An Idiot Faucette Is wrote:

Why do sites continue to post this rubbish? This fool keeps trying to help his short Hedge Funds out and it isn't going to work. Please someone, sue this clown and lock him up.

JUNE 5, 2013 7:48 P.M.

Chippy55 wrote:

Faucette's homeboys, or homies, at Detwiler Fenton have been kinda quiet lately, in my opinion that's what happens when the SEC is after yer azz. Detwiler of course is the penny stock selling at 10 cents per share who wrote a negative piece on Blackberry. Folks, take to Twitter and let them know what you think of Faucette and Pacific Crest.

RIM trolls paid to keep down the truth. It may take 2-3 years for bbry to crash and burn. I'll enjoy watching that with my short positions. Apple is pad business dead as bbry CEO explains it. Please give me a break. After being blinded my the RIM propaganda, I see that Apple makes a much superior product. Bbry CEO won't admit to defeat. Truth is he let go the technical talent and therefore doesn't have the staff to work on PlayBook. Writing just as a person who lost money on the long side. I'm going short and after 2-3 quarters, watch it go into decline. The luster will wear off the X10 and q10. Blackberry is treading above water now but will slowly drown.

JUNE 5, 2013 8:12 P.M.

OnTheBalance wrote:

Shameful day for investors in America. Pretend Analysts writing the same unresearched articles on behalf of Shorts Cartel. SEC napping. Trading in a Banana Republic doesn't get any more crooked. Will the SEC ever wake up? Or are they looking away because Shorting Scams have become so rampant that they don't want to deal with the embarrassment of having to catch up on too many cases?

JUNE 5, 2013 8:16 P.M.

Tiernan Ray wrote:

Kurt Windibank: What was reported for FYQ4 (ending February 28th) on March 28th was 1 million BB10s sold, or "sold in" in industry parlance. BlackBerry did not disclose BB10 "sell through," meaning sales to end customers. What they said was that total sell-through was estimated to be 7.9 million units for all BlackBerry devices. One analyst participating in the earnings call asked for a specific number for BB10 sell-through. CEO Thorsten Heins replied that "What we see roughly is that, from what we have shipped into the markets, two-thirds to three-quarters already have sold through. I mean it is very dynamic." Some people have taken that statement to mean that two third to three quarters of the 1 million sell-in was sold through, while others, such as Faucette argue that the statement could apply to sell through of everything that was sold in as of March 28th, meaning the quarter plus a month. Faucette's contention is that 250,000 units were sold through in FYQ4. He has no evidence for that, it is a guess. Others, such as Peter Misek of Jefferies, argue that BlackBerry sold through nearly all the 1 million BB10 units they sold in during the quarter. Misek also has no evidence, he is also estimating. There has as yet been no definitive statement — that I know of — from BlackBerry as to what sell through was in FYQ4 just for BB10. Everyone argues what they believe is the actual sell-through.

JUNE 5, 2013 8:17 P.M.

OnTheBalance wrote:

Pacific Crest must have their next report on Blackberry's Q10 US sales channel survey completed and ready to go to print by end of June 4th. The fact that official launch is June 5th should not get in the way. Tiernan, are you going to copy and paste and run that too? Shame on Barron's.

JUNE 5, 2013 8:24 P.M.

I don't trust their checks! wrote:

I guess majority don't care what Faucette says and believe their "checks" since BBRY went up today. Hope people do their own research because I think QNX is awesome & their new phones are great too. IMO there's only so much we need from our smartphones but the security BBRY provides is very important.

JUNE 5, 2013 8:25 P.M.

Anonymous wrote:

Pac Crest is at it again !!!!

Shorting BBRY and then making up negative stuff to keep the stock down. Clearly the poster child for what's wrong with Wall Street.

JUNE 5, 2013 8:26 P.M.

willietruner wrote:

I have a friend that works at the largest bank in Canada. He says his corporate Q10 has been on back order for weeks from the largest telco in Canada.

JUNE 5, 2013 8:37 P.M.

Joe wrote:

"He's at it again" only because Tiernan Ray publishes Faucette's stuff. Who else publishes it, and if they do, is it such a widely read publication as Barron's? At least Ray actually read some viewers comments and put Faucette's use of the word "checks" in quotes, to give a little less support to those supposed checks, though he did not describe what they were (as if Ray even asked). But Ray still didn't mention Faucette's past history of being totally wrong about his estimate of the prior quarter sales.

Ray seems to be content with being a mere reporter, just parroting back the materials he is given, instead of a real journalist, taking a broader view, and stating his opinion on, the reliability of the latest opinion he is given by a known bear on BBRY. Other real journalists do that, but not Ray. Guess it's too much work to do so.

JUNE 5, 2013 8:38 P.M.

kurt windibank wrote:

Tiernan,

His channel checks have been widely challenged.

His numbers exclude the rest of the world..ta know..where they sell a lot of phones.

Thanks for responding.

You do have to admit that thus guy just can't seem to keep his gun holstered.

You don't find it odd that every time there is good news he comes out guns blazing?

His track record on BB10 being DOA was wrong,his Q4 estimates were changed every couple of weeks and his Tip ranks score shows that a cointoss is more accurate than his estimates.

Every dog has his day..blackberry is alive and well and coming for guys like him real soon.

JUNE 5, 2013 8:43 P.M.

tgus wrote:

thanks kris for your comments

I agree with you that Tiernan enjoys publishing this BS from James F. He and James are the same breed.
Not surprised at all. Tiernan and James have zero credibility.
Interesting that these people can still call themselves analysts and still hold a job. Shameful.

JUNE 5, 2013 8:47 P.M.

sammybaby wrote:

10,000 a week isn't bad. Why don't you add up all of the other countries and see what that adds up to.

JUNE 5, 2013 8:48 P.M.

David wrote:

Faucette is a paid liar.

JUNE 5, 2013 8:53 P.M.

tgus wrote:

thanks kris for your comments

I agree with you that Tiernan enjoys publishing this BS from James F.
He and James are the same breed.Not surprised at all.
Tiernan and James have zero credibility and assume that their readers are a bunch of stupid people that are not capable of analytical thinking. Shameful.
Interesting that Tiernan and James can still call themselves analysts/reporters.
Shameful that these kind of people still can hold these positions.

JUNE 5, 2013 8:55 P.M.

David wrote:

It's beyond me how this total fraud is allowed to continue libeling Blackberry with impunity. The sleazeball should be charged criminally.

JUNE 5, 2013 9:07 P.M.

tgus wrote:

It is waste of time to ask for the objective article from Tiernan and James because they think that they are untouchable.
I am sure that if people could demonstrate in front of their offices and demand truth then maybe they will pay attention to peoples' objections, otherwise it is pointless.

Tiernan and James don't offend your readers by publishing BS, people are smarter then you think.

JUNE 5, 2013 9:08 P.M.

Anonymous wrote:

I said something ealier about Blackberry and have to say I'm sorry. I'm actually messed up in the head and need to see a doctor.

I have an issue with anger and my venting is getting worse,

So sorry for all the untrue statements and false claims I made about Blackbery it is only meant to take out my fustrations.

JUNE 5, 2013 9:42 P.M.

Fishonov wrote:

James! Does your middle just happen to be" yourmoniesgoingdownthe" Faucet??!!!

JUNE 5, 2013 9:54 P.M.

Anonymous wrote:

Way to post this stuff Ray, you do realize your credibility will be shot once the truth is revealed.

JUNE 5, 2013 10:26 P.M.

MrToronto1 wrote:

Hey Tiernan, how do you like them comments about you and your buddy James Flosset.?

JUNE 5, 2013 10:52 P.M.

fukette wrote:

Barrons, I suggest you stop reporting on the heap of s*** that comes out of Faucettes' mouth. It does not add any value.

JUNE 5, 2013 11:09 P.M.

techstock wrote:

this one is faucette's last stand. nobody wil bother listening to him again.

JUNE 5, 2013 11:42 P.M.

Ashar Ng wrote:

you may not consider eligible to comment on BB Q10......you are not even close to.....

JUNE 5, 2013 11:46 P.M.

rosel wrote:

I think Pac Crest was the one who said that BB10 is dead upon arrival. Well after months from release BB is still alive and kicking. And now another lies!

JUNE 5, 2013 11:47 P.M.

Anonymous wrote:

I think he needs to change his tampon

JUNE 6, 2013 12:49 A.M.

ashar ng wrote:

are you graduaged from school yet ?
you are too stupid to write......
you know nothing about BB 10....

JUNE 6, 2013 12:50 A.M.

OnTheBalance wrote:

Very much like the boy who cried wolf too often, and fortunately for retail investors (doubt institutional investors ever paid any attention to the Faucette / Ray duo), these fictional "meanderings" devoid of facts are losing any impact that they might have had in the past. Sad for Tiernan Ray, because forever, his name will be associated with James Faucette who has become the laughing stock of the world of investment "analysis" and investment "journalism". And Tiernan, have you ever thought of providing your own assessment? some analysis of what you are putting out? or is blogging just about copy/pasting? Faucette on the other hand should re-consider a career in fiction writing...nice way to pass time in jail.

JUNE 6, 2013 12:50 A.M.

Madan Limaye wrote:

I should thank you Mr. Tiernan for starting this note with "He's at it again:" - I just couldn't stop laughing. I guess, now it is so apparent that even you couldn't stop yourself from pointing it out to Mr. James Faucette that he is kind of going too far and that even you are not buying his stories anymore. All of them were able to buy $BBRY at this price (including myself) should in a way be thankful to Mr. Faucette for providing us this opportunity - let me be the first to say thank you to Mr. Faucette!

Thanks for the information about Dan Loeb, I sincerely hope that this news does come out to be true. I guess Dan should also say a big thanks to Mr. Faucette and treat him really well for helping him grab $BBRY at such a low price!

JUNE 6, 2013 1:04 A.M.

Wanderer wrote:

So the BlackBerry dingle berries have been shouting for years "wait for QNX" while the company fell apart.

Then they shouted "wait for BB10, we've renamed QNX" as RIM became BlackBerry but still lost more sales.

Then they shouted "wait for Z10, that will rule the day" but the Z10 fell flat on its face.

Then they shouted "wait for the Q10, that will turn everything around" but the Q10 was less popular than the Z10.

What is there left to wait for? BlackBerry has put out there best and to someone who has never used an iPhone, Nexus, or even a Galaxy phone it is surely a huge improvement over BB7. But their tech is 3 years behind the curve. Don't worry, someone's bound to shout "wait for the Q5, that'll roll everyone back" but in the end, all BlackBerry has going for it is a few people who shout a lot.

JUNE 6, 2013 1:28 A.M.

OnTheBalance wrote:

Friends at SEC should pay attention to events from the sporting world that has become a major embarrassment to America ....Lance Armstrong. His well orchestrated cheating was not caught when it should have been. Shorting cartels, their scumbag analysts and paid for posters need to be monitored for illegal activities and prosecuted forcefully, with zero tolerance. Without action the SEC is becoming an accomplice in defrauding individual American investors.

JUNE 6, 2013 1:34 A.M.

Anonymous wrote:

@Tiernan - Does thus report comment anywhere on business sales of the Q10? Given this is mostly a corporate/enterprise device sales happen through carrier business channels not traditional retail. That could make calls to particular stores misleading and not a good demand représentation. When a corporate such as Canadian Tire buys 2000 units, they don't do so by walking into the local store and buying them.

JUNE 6, 2013 1:36 A.M.

Eli wrote:

@Tiernan - Does thus report comment anywhere on business sales of the Q10? Given this is mostly a corporate/enterprise device sales happen through carrier business channels not traditional retail. That could make calls to particular stores misleading and not a good demand représentation. When a corporate such as Canadian Tire buys 2000 units, they don't do so by walking into the local store and buying them.

JUNE 6, 2013 2:39 A.M.

@ Eli wrote:

You are incorrect imagining corporations are slipping under the radar of the media or news; unlike CT. BB wouldn't give up opportunities to flog anything positive... The fact is. Besides CT. No corporation is giving BB any special preference. Consumers are determining everything. Which is how it should be. Unfortunately Canadians are not that smart. Look at the CRTC and that inferior lot running BCE that tries to pump mental health issues to the same people they are screwing without mercy. AT&T or Verizon could put BCE out of business in a very short time indeed. And ordinary citizens would benefit.

JUNE 6, 2013 4:32 A.M.

@ eli wrote:

"Canadians are not that smart"...how much respect should one have for someone posting such derogatory remarks anonymously on a blog? As for thé CRTC, likely accurate but has little to do with BlackBerry that operates in a competitive global market. The point I make is still valid. The law firms, banks. Gov't that upgrade do not get captured in storefront surveys. This is an attempt to portray as bad a case as possible. Recall this same analyst forecasted 275k units of sell in for Q4 and the number was actually 1 mm. He was off by almost 4x. He initially forecasted 1-1.5mm units for Q1 but has now taken his numbers up to 2.9mm. Why should I trust his analysis? It's been woefully incorrect.

JUNE 6, 2013 5:36 A.M.

ashar ng wrote:

have yor graduated from school yet ?
why you are keep talking something you don't know.
US elite said military law enforcement are adopt BB 10
which means you are nothing but an idiot ......

You will notice on YouTube that BB's COO is chatting w the kid from Crackberry. 38+ viewings. Search for Q10 Blackberry. His name is Kristain Tear. There's also an article out there from yesterday. And he says it's all about the consumer and the US market. So if the storefront as you describe it is lagging then I take that as very significant.

PS. If Canadians were that smart. How come upper management at BB has been restaffed with so many Teutonic Huns that have accents like Arnold? Eh. That's just my impression. Ya ya. Datz fur shoor. LOL

Any consumer interest would be gravy. It is not necessary for them to be significantly profitable. All that is needed is a decent upgrade cycle from the existing user base. One day maybe i'll adopt the wonderful U.S. culture -- the fabulous cuisine, cars, fashion and crispness of the brand of english spoken there. For now, i will shop elsewhere!

JUNE 6, 2013 7:14 A.M.

@ @ Anonymous wrote:

Gosh. IOW. Are you calling their CEO a lying bull shitter? It's pretty easy to dredge up everything he said that's worth quoting. Hmm. Juicy stuff too. Hehehe. And as far as he's concerned. Guess what. The US is número uno in what matters. And the market will note that. It already has...

JUNE 6, 2013 7:17 A.M.

Michael wrote:

Why the blog writer would even decide to make the inaccurate content of a deceitful analyst the total subject of this blog....was an irresponsible decision . Shame on Faucette and shame on you.

JUNE 6, 2013 7:31 A.M.

@ Michael wrote:

Shame? Knock it off dumbo. Don't you like the chart accompanying the report? I do. See the pretty colors and the bars?! There's red, blue and green. Neat eh. Numbers too. It's scientific. Much more thoughtful than anything the brain dead Peter Misek could produce.

JUNE 6, 2013 7:35 A.M.

@ @Anonymous wrote:

Gosh. You're calling the CEO a liar. Maybe you should look up what number one said re...

JUNE 6, 2013 8:56 A.M.

anadigics wrote:

Faucette says two opposing things:
1. that “checks” of sales in the U.K. and Canada show Q10 sales falling to a level of about 10,000 units or so per week in each country (wow! this must really add up to his 300k estimate for the 1M sold)
and
2. that BBRY builds more than they can sell (2M monthly vs. 1-1.5M sell through) and so inventory is building up.

It beats me how 2 x10k weekly in 25% of their market (UK+canada) adds up to 1.5M sell through. But he is excused from math and logic.

But the largest in-your-face is another one:
He claims that BBRY is overbuilding by 500k a month but at the same time either the Z10 or the Q10 or both are sold out 20-30% of the time in UK and Canada, because "some stores only receive 5 units and it is easy to sell out at those levels".

So where ARE those phones ?!? Is BBRY hiding them out?
When there seems to be no logic, there most likely is another one. This excel-illiterate guy is 50% underwater for some of his clients.
SEC should investigate him, and if they find that he is a net cover on the days following his reports he should be hidden from view.

Like always, my last question is:
Tiernan, what is your opinion?
Do you find his hand-waving insightful?
What do you think about the numbers above? (they are not mine, I just point that they do not add up at all)

JUNE 6, 2013 9:04 A.M.

the headless lizzard wrote:

@anonymous
>> "This guy is destroying significant shareholder value"
No, he isn't, he is just a mouthpiece. The fool is the one who believes, not the liar.
If people get scared enough, they will sell to the greedy. As simple as that.

The ones "destroying" the price are those who borrow shares from Peter to pay Paul.
Even that, since June last year the short interest is up 100% and the price is UP some 30-35%. (this is what lazy CNN money guys call "negative investor sentiment")
So this can not go on forever, and at the end it all levels out. If you really think that things are looking up for BBRY and the climb has already begun, then hang on tight, this show will stop at some point.
If you are looking to make a quick buck, look elsewhere or be prepared to suffer :-)

JUNE 6, 2013 9:10 A.M.

Dave wrote:

When are you guys at PC going to start growing up and reveal the source of your garbage reports. Remember when your "checks" indicated that BBRY would only sell 100,000 units? Cannot believe anyone even publishes your reports. Based on the stock price, you guys have called wolf too often for anyone but bear raiders to care about. I hope BBRY sues your firm up the yang.

JUNE 6, 2013 9:18 A.M.

Facette who wrote:

Pacific Crest‘s James Faucette has weekly notes on BlackBerry, that seems very questionable, plus Pac Crest is a bucket shop...and Barrons is ?

JUNE 6, 2013 9:22 A.M.

Munx wrote:

Tiernan,

You state:

"Some people have taken that statement to mean that two third to three quarters of the 1 million sell-in was sold through, while others, such as Faucette argue that the statement could apply to sell through of everything that was sold in as of March 28th, meaning the quarter plus a month. Faucette’s contention is that 250,000 units were sold through in FYQ4. He has no evidence for that, it is a guess. Others, such as Peter Misek of Jefferies, argue that BlackBerry sold through nearly all the 1 million BB10 units they sold in during the quarter. Misek also has no evidence, he is also estimating."

So Faucette's contention is that 250,000 units were sold through FYQ4, and that the "two thirds to three quarters" sell through rate applies to all units as of the conference call on March 28th. Even if this were true, it would imply accelerating sell through rates, from 250,000 units in month 1, to at minimum 360,000-500,000 units in month 2. Of course this logic breaks down even further because I have based month 2 figures on the 1 million sell-in provided for month 1.

So his contention that sell-in was to Mar 28 conflicts with his chart which shows sell in falling off the cliff after the first month.

ROW sales muddies the water a little but what is clear is that Faucette's table is not supported by the data provided by the company to date. Isn't this basic fact checking?

JUNE 6, 2013 9:29 A.M.

bucket shop wrote:

facette and his snake eyes - yiks

JUNE 6, 2013 9:35 A.M.

Deep wrote:

James , what a garbage article......get a life...

JUNE 6, 2013 9:40 A.M.

iDontFollow wrote:

It looks like that f/%&$%ed up graph dates from February.
Look close, the numbers add up to the famous 300k guesstimate

They were busy, he did not have the time to update it, but expects to fool anybody with that...

JUNE 6, 2013 9:41 A.M.

anadigics wrote:

@Munx

Awesome.

JUNE 6, 2013 10:14 A.M.

Tiernan Ray wrote:

IDontFollow: The 300,000 was and is Faucette's estimate for BB10 sell-through, not sell-in, for FYQ4. The company has never reported BB10 sell-through for FYQ4—see my reply to Kurt Windibank below.

JUNE 6, 2013 10:17 A.M.

Tiernan Ray wrote:

Munx: Faucette's chart doesn't say anything about sell-in (reported sales), it only shows what he thinks was sell-through, and yes, he contends that sell-through in the month of March fell off in the U.K., while sell-through, according to his conjecture, rose overall because of the addition of the U.S. and other territories.

JUNE 6, 2013 10:22 A.M.

Tiernan Ray wrote:

Anadigics: The one million you are referring to in FYQ4 is the reporter number from BlackBerry, whereas the 300,000 Faucette is postulating is sell-through. The chart shows what he thinks is sell-through in three markets, U.K., U.S., and Canada. There are other markets, obviously, but Faucette contends the sell-through in total still adds up to less than the production run rate and the sell-in that the company may have had in FYQ1. As for my view, it's all conjecture. Faucette can't know for sure. The results ultimately will show, over multiple quarters, what has been happening. As Heins said on the March 28th conference call, "it is a dynamic situation," and so guessing about any of it is a tricky act.

JUNE 6, 2013 10:24 A.M.

Tiernan Ray wrote:

Kurt Windibank: Like a lot of analysts, Faucette is publishing frequently where he thinks there is a lack of information, hoping for an edge in gauging the stock. But like you said, the twists and turns for BlackBerry have been throwing people off for a whole now, and may continue to do so.

JUNE 6, 2013 10:39 A.M.

skeptic wrote:

Tiernan,
Your by-line include "actionable investing ideas". If this is a goal, why do you write articles based on what you even suspect is the wild guess of an analyst.

JUNE 6, 2013 10:42 A.M.

Tiernan Ray wrote:

Skeptic: I didn't write the phrase "actionable investing ideas," but I'll leave it to you and others to decide what's actionable. I don't think an entire blog is going to be rated based on one post that some people may not like. On the other hand, given the strong positive conclusions many have drawn about BlackBerry in this case, perhaps this post is, indeed, actionable.

JUNE 6, 2013 10:47 A.M.

Anonymous wrote:

@Tiernan - Faucettes initial 275k estimate for Q4 was sell-in, not sell thru. He claimed carriers would not carry much inventory, etc. The bear story changes continuously -- 9 months ago, they would run out of cash prior to launch. Beginning of the year, estimates for shipments in Q4 were starting at the 300k range...now we are shifting the thesis to estimates on sell-thru as the prior claims proved wholly inaccurate. What we do know with a certainy is that bears numbers (including Faucettes) have come up north of 100%. Track estimates over the last 6 months and they keep getting increased. At some point, you should who readers what Faucettes stock picking record is and how inaccurate his data point predictions have been on the company.

JUNE 6, 2013 10:54 A.M.

Tiernan Ray wrote:

Anonymous: No, Faucette's number of 250,000 to 300,000 was never sell in, it was sell through. In a note to clients on March 26th, two days before the FYQ4 report, he wrote "We estimate that through the end of the February quarter, total sell-through of the Z10 probably totaled 250,000 to 300,000 units, with most of those units having been sold in the United Kingdom and Canada." That report, and that line of text, was quoted on this blog on the 26th -- see http://blogs.barrons.com/techtraderdaily/2013/03/26/bbry-fyq4-revenue-beat-says-bgc-miss-says-national/.

Faucette, moreover, actually modeled revenue higher than it turned out, at $2.81 billion, versus $2.68 billion reported, implying that his sell-in estimate -- which represents reported sales -- was not lower than what BlackBerry sales turned out to be. You are correct that naysayers have been generally wrong about BlackBerry over a substantial period now. Hopefully, the company will prove them wrong in future.

JUNE 6, 2013 10:57 A.M.

Munx wrote:

Tiernan,

His chart shows sell-through. My point is that his sell-through tapers off dramatically in this chart after FYQ4 (end of Feb), but you state his contention is that total sell-through is 66-75% to the end of March (or 660,000 - 750,000 units by the end of March minimum) so sell-through should be increasing in March.

His chart shows approx. 220,000 units in Feb. and only 175,000 units in March, a decreasing sell-through for the markets shown. His numbers don't align with company reported data, especially when you consider total sell-through will be higher than 660k-750k because I am using Feb sell-in x sell-through rate and not March sell-in x sell-through rate.

@Tiernan -- from Faucette's Feb 20 report...
“We believe the Street has gotten ahead of the potential reality for BB10 shipments,” he writes. “There is no line of sight to profitability; we remain sellers of BBRY.”

Faucette writes that based on his checks, he thinks Z10 shipments in the quarter are tracking to 275,000 to 325,000 units; he says the Street consensus is about 1 million units. And he adds that “any benefit from the Z10 is likely to be at least partly offset by cannibalization of Bold 9900 sales, which our checks indicate have declined materially since the Z10’s launch.”

He adds that the May quarter is also tracking below expectations. “Applying normal rates of decay in launched markets and assumptions for channel fill in the United States, we believe the company is likely to ship-in roughly 1 million to 1.5 million units in the May quarter. We estimate Street expectations are for roughly 3 million to 4 million units.”“We believe the Street has gotten ahead of the potential reality for BB10 shipments,” he writes. “There is no line of sight to profitability; we remain sellers of BBRY.”

Faucette writes that based on his checks, he thinks Z10 shipments in the quarter are tracking to 275,000 to 325,000 units; he says the Street consensus is about 1 million units. And he adds that “any benefit from the Z10 is likely to be at least partly offset by cannibalization of Bold 9900 sales, which our checks indicate have declined materially since the Z10’s launch.”

He adds that the May quarter is also tracking below expectations. “Applying normal rates of decay in launched markets and assumptions for channel fill in the United States, we believe the company is likely to ship-in roughly 1 million to 1.5 million units in the May quarter. We estimate Street expectations are for roughly 3 million to 4 million units.”

Steve - Loved your recent "Best Smartphones" post. How did I know that you would have iPhone 5 as #1 before I even read the article?

I must be iPsychic.

Strange thing though is that iPhone sales reached a "peak" of 48 million a couple of quarters ago and that number will, probably, never be seen ever again from Apple.

Also, clearly, the Samsung Galaxy franchise is taking a great "bite out of iPhone 5 sales" and there are many reports that 55% of people buying the new BlackBerry Z10 are "leaving iPhone and other OSs to buy a BlackBerry BB10 phone - and the Q10 is just launching".

Bottom line, with the 6 year old iOS operating system, one of the smallest and strangest sized screens on a smartphone today and inferior specs on many fronts - the iPhone 5 is "hardly" the number one smartphone on the market today - except, of course, by followers of a certain "ideology" that by most accounts - is getting a bit "long in the tooth - from $705 - $438"...

Q10

JUNE 6, 2013 12:05 P.M.

freddysrevng wrote:

BTW.

To all of my fans! I am now the new research analyst at GNAA!

Look us up!

JUNE 6, 2013 12:06 P.M.

Rob wrote:

Tiernan,

Don't let the BBRY zealots sway your writing. "He's at it again" comes across as a dismissal, and reeks of capitulation to the cult that attacks at the mere hint that BBRY could possibly fail. Intelligent investors appreciate hearing ALL the opinions. And the vast majority of your readers won't reply with counterpoints you might hear in the bathroom at the local bar about rival sports teams. We're too busy trying to make money. Keep up the good work and try to ignore the circus as it goes by.

JUNE 6, 2013 12:24 P.M.

Kris wrote:

"Blackberry is on real solid grounds" Blackberry CEO during blackberry live event. He did admit that there was a time when blackberry was not doing good. I do not think that a CEO of this company is lying. i trust him. Blackberry is more than USA sales, of course USA is needed and is just doing fine. Blackberry is more than just hardware sales. Blackberry has top noch CEO who has the guts to admit his company's weaknesses, this quality is important to realize the true stentgh. It is mostly about people + cash + good product + timming + public sentiments. Blackberry already has 3.5 out of those 5 points. Not a bad start. I dont think that Tiernan Ray beleives that blackberry CEO is misleading people by claimimg solid grounds for blackberry? Correct me if i am wrong? Still i would read this article with a smirk not a grin.

JUNE 6, 2013 12:56 P.M.

Tiernan Ray wrote:

Munx: Yes, Faucette is showing weaker sell-through in March, but he doesn't actually claim that there was 66% to 75% sell through during that period. What was cited by me in my reply to Kurt Windibank earlier is that Heins told an analyst on the March 28th call that the company is selling two thirds to three quarters of everything they have "shipped into markets," without specifying which shipments they were. That could have referred to shipments of BB10 just for FYQ4, shipments through March 28, or something else still. Plus, Faucette's chart includes only three regions, which means it can't possibly be comprehensive for sell through for the period cited.

JUNE 6, 2013 1:11 P.M.

Tiernan Ray wrote:

Anonymous: You are right, thank you for pointing that out. In the February 19th report, Faucette was only modeling shipments of perhaps 300K BB10 units, but by the time he published his March 26th note, just before the FYQ4 report, Faucette had raised his shipment estimate and raised his sell through estimate to upward of 300,000. Interestingly, Faucette didn't change his $2.84 billion estimate, and as it happens, revenue came in lower than he or anyone expected because shipments of older BlackBerrys were lower in the quarter than he or anyone else expected. Others got the quarter wrong as well. Peter Misek, for example, of Jefferies, had an estimate of 500,000 in sell in, which was half what the total turned out to be. I would have to do a more thorough review, but my sense is that several people got the quarter wrong, and probably many will continue to get it wrong, as there are a lot of moving parts, and as Heins remarked in March "it's a dynamic situation."

JUNE 6, 2013 1:45 P.M.

Munx wrote:

Tiernan,

Exactly my point. No matter which way you slice Heins sell-through range of 65-75%, either for FYQ4 or up to Mar. 28, Faucette's numbers do not align.

What is clear is that Faucette is predicting 1-1.5 million in sell-in for the May quarter. On June 28 we will have a hard data point for comparison.

JUNE 6, 2013 2:04 P.M.

Wakeup people wrote:

When are people going to realize these guys are all in cahoots. Just the bounce between 13 and 15 is enough to get rewarded handsomely. Falsette puts out bad news to push the price down. In the meantime, his cronies are purchasing the shares that have fallen. Then, Peter Mistake publishes positive reports to help drive the price up, so Falsette's cronies can sell. Then, Cancor sore comes out with a ridiculous report that drives the price back down.

Playing these swings for several months will help the people that shorted in single digits recover. There is little likelihood of the stock falling to single digits and all of the analysts know it.

JUNE 6, 2013 2:36 P.M.

Cameron wrote:

On what basis do you give James Faucette ANY credibility?

Please explain.

JUNE 6, 2013 2:47 P.M.

Same old thing!!!! wrote:

Yea it is time for this guy to get fired. This is boring news!!!!

JUNE 6, 2013 2:59 P.M.

Tiernan Ray wrote:

Munx: Slightly different, actually Faucette is predicting half a million BB10 units *sell-through* per month at a current run rate. Here is the response directly from Faucette's office: "We have not yet published a total sell-in or sell-through number estimate for the May qtr. What we have said recently is that we believe that total global sell-through of BB10 devices is running at ~500K devices/month, or less."

JUNE 6, 2013 3:42 P.M.

Anonymous wrote:

Tiernan,

You state in a response to a comment-- "The company has never reported BB10 sell-through for FYQ4—see my reply to Kurt Windibank below." I could be wrong, but I don't think ANY smartphone maker reports sales on a sell-throught basis because they don't know what the sales of the products they sell to telecom companies are, at least for any specific period. I believe that sales are recorded, for financial statement purposes, when products are sold to the telecoms, with the exception of specific purchases to end corporate customers, which would be dwarfed by sales to telecoms. I believe those sales to intermediary companies are the only sales that get reported as sales by the cell phone makers.

Since you work in this field full time, you should already know the answer to this issue. If not, though it would go beyond your normal procedure of just copying what you are given to publish by analysts, you should do some digging on this issue, as any good journalist worth his salt would do, to find out what the answer is. However, I doubt you will do so.

As things now stand, your statement can be read to imply that at least some cell phone makers other than Blackberry report sell-through sales numbers. As stated above, I don't think that is the case..

JUNE 6, 2013 3:44 P.M.

Joe wrote:

Tiernan,

You state in a response to a comment– “The company has never reported BB10 sell-through for FYQ4—see my reply to Kurt Windibank below.” I could be wrong, but I don’t think ANY smartphone maker reports sales on a sell-throught basis because they don’t know what the sales of the products they sell to telecom companies are, at least for any specific period. I believe that sales are recorded, for financial statement purposes, when products are sold to the telecoms, with the exception of specific purchases to end corporate customers, which would be dwarfed by sales to telecoms. I believe those sales to intermediary companies are the only sales that get reported as sales by the cell phone makers.

Since you work in this field full time, you should already know the answer to this issue. If not, though it would go beyond your normal procedure of just copying what you are given to publish by analysts, you should do some digging on this issue, as any good journalist worth his salt would do, to find out what the answer is. However, I doubt you will do so.

As things now stand, your statement can be read to imply that at least some cell phone makers other than Blackberry report sell-through sales numbers. As stated above, I don’t think that is the case..

JUNE 6, 2013 4:01 P.M.

Tiernan Ray wrote:

Joe: No, BlackBerry is not different from other vendors in the sense that like others, they report revenue upon receipt from the customer, who may be a retailer or a carrier, and they cannot know completely when those units will sell through to the customer. The company provides a total for sell through of all BlackBerry units that they estimate. Last quarter, FYQ4, the company estimated sell through was 7.9 million units. Like every other handset maker, analysts are left to gauge the supply and demand situation based on comparing what is said about shipments and what is said about inventory levels. The difference at the moment, for BlackBerry, is that the everyone is focused on BB10-based unit sell-through, and the company does not break out BB10-based units as an individual category within the sell through total they estimate. The difference from Apple, furthermore, is that Apple has a large retail operation of owned stores, where they can directly gather sell-through data, presumably, from individual end user purchases, for at least a portion of total device sales.

JUNE 6, 2013 4:14 P.M.

Munx wrote:

So Faucette's previous report stated:

"Applying normal rates of decay in launched markets and assumptions for channel fill in the United States, we believe the company is likely to ship-in roughly 1 million to 1.5 million units in the May quarter. We estimate Street expectations are for roughly 3 million to 4 million units."

And today after reaching out to you they claim not to have made the previous statement:

“We have not yet published a total sell-in or sell-through number estimate for the May qtr. What we have said recently is that we believe that total global sell-through of BB10 devices is running at ~500K devices/month, or less.”

The spreadsheet presented in the article as backup does not align with company data, and now his office is contradicting previous *sell-in* forecasts and claiming they are actually *sell-through* figures.

This is bucket shop analysis. Their credibility is suspect and you should not be putting it on equal footing as legitimate research.

JUNE 6, 2013 5:02 P.M.

Tiernan Ray wrote:

Munx: The prior statement as to sell in, doesn't necessarily contradict a sell-through estimate of 500,000 a month, if it were the case that each and every unit shipped were selling through to the customer, so there would be parity of 1:1 -- 1.5 million shipped in the quarter, 1.5 million sold through. That's certainly possible, although anyone would expect that shipped numbers would be higher. You're right that the language is sloshing around, and so one can only assume Faucette had some lower number for sell-through previously, and that it has risen now -- and, consequently, so has his shipment number, whatever that is. Like you, I don't appreciate the back and forth of the language, but it happens all the time in this business. But I don't think I would characterize Faucette as saying he didn't make the prior statement. Rather, he's reformulating the sell-in and sell-through numbers as he, like others, is trying to triangulate what either or both numbers will end up being. It's a guessing game, and his numbers are guesses like everyone else's, but there is also room built in, as you imply, to not be totally tied down to a number for either metric. That's pretty much where things are at this point, no one is being tied down to firmly to a number. As for the graphic, if that's what you are referring to by "spreadsheet," the chart shows what Faucette thinks was and is sell-through in three markets only. Again, there is no official word from BlackBerry for exactly what sell through was of BB10 devices in any period, though there are statements by management that could lead one to take this or that position. Until there is an official count from the company, there is no "company data" for Faucette or anyone else to compare with. There is just conjecture.

JUNE 6, 2013 5:31 P.M.

Joe wrote:

Response to Tiernan Ray,

Apple is unique in that, with their stores, they sell a lot more to direct customers than other smartphone makers. But BBRY is the same position with regard to knowing what their sell-through sales are as other smartphone vendors. I hope you remember to mention that when you mention BBRY"s lack of stating sell-through sales which, as you point out, they can't know.

Also, I should mention that I don't agree that BBRY's inventory levels are that critical in determining current supply of and demand for their products. Since BBRY doesn't make the end sales, but mostly records all of its sales when they ship product to an intermediary. a lot of their unsold (to the end customer) inventory is maintained on the intermediary's books. Ultimately, if there is not adequate sell-through, any excess inventory held on the books of the intermediaries will translate into either decreased sales to the intermediary, to work off its excess inventory, returns from the intermediaries to BBRY (recorded as return on BBRY's books), or both. But that would most likely be a delayed effect, occurring in a succeeding quarter, and that delay could be mixed in with current quarter conditions, so those two events (i.e. excess inventory, somewhere, reducing current sales and/or excess returns) could easily be a blend of prior quarter (or quarters) events and current quarter events. This miss mash will make it unclear as to what is happening with respect to current quarter shipments that resulted in end sales to customers that same quarter. I'm surprised nobody mentions this condition.

Tiernan Ray wrote:
Joe: No, BlackBerry is not different from other vendors in the sense that like others, they report revenue upon receipt from the customer, who may be a retailer or a carrier, and they cannot know completely when those units will sell through to the customer. The company provides a total for sell through of all BlackBerry units that they estimate. Last quarter, FYQ4, the company estimated sell through was 7.9 million units. Like every other handset maker, analysts are left to gauge the supply and demand situation based on comparing what is said about shipments and what is said about inventory levels. The difference at the moment, for BlackBerry, is that the everyone is focused on BB10-based unit sell-through, and the company does not break out BB10-based units as an individual category within the sell through total they estimate. The difference from Apple, furthermore, is that Apple has a large retail operation of owned stores, where they can directly gather sell-through data, presumably, from individual end user purchases, for at least a portion of total device sales.

JUNE 6, 2013 5:39 P.M.

Tiernan Ray wrote:

Joe: The fact that actual sell through is hard to quantify is not unique to BlackBerry, and it is certainly not being raised here only with respect to BlackBerry. In the early days of the iPhone, there were reports about iPhones stacking up in warehouses, as the Street pondered how much was actually being sold through versus being shipped. Over time, some of that has lessened for some companies to the extent that they give very specific information about inventory quarter by quarter. To some extent, what's going on with guesses is the lack of information coming out of BlackBerry. But they are early in a turnaround effort with a new platform, and so it is not entirely surprising that they would not have as much information to offer as might be desired. As for the "mish mash" you refer to, not only is it mentioned, it is the entire subject of some Street research. You have only to look at Faucette's report in which he tries to triangulate the relationship of shipments to inventory and sell through:http://blogs.barrons.com/techtraderdaily/2013/05/31/bbry-bb10-production-in-excess-of-sell-through-demand-says-pac-crest/

Everything you're suggesting in the latter part of your comment is exactly what analysts are trying to do, which is to connect the dots within a collection of several moving parts that make up the "mish mash" to which you refer. It is the "dynamic situation" to which CEO Thorsten Heins has referred.

JUNE 6, 2013 5:51 P.M.

Munx wrote:

Tiernan,

Changes in analyst's forecases are expected. I do however take issue with some as I see their work as sub-standard and even purposely misleading.

Faucette has only recently decided that sell-through was going to be his metric of particular focus. He notably changed from sell-in to sell-through forecasting on May 31. I believe he stands alone on using sell-through, as the rest of the street is forecasting *sell-in* of approx. 3 million units for the quarter. Faucette and you both know that sell-through is virtually impossible for the company to nail down. Of course inventory and the balance sheet will eventually reveal potential build rate vs. sell-through rate issues.

And yes, the figure presented in the article as back up was created with a spreadsheet program called Excel. It was created in seconds using the chart auto formatting tool and looks like something a student would offer as backup. Getting past its appearance, I have difficulty reconciling Heins`s 66-75% sell-through statement with the figures in the graphic, irrespective of how Heins`s numbers are interpreted (to end of Feb or to end of March).

This, in concert with other figures, language his office is "sloshing around", and his previous miss around the BB10 launch, lead me to conclude that his analysis is suspect.

Faucette on May 31:

Our sell-through checks continue to indicate that global demand is running well below 500,000 per month for the Z10 and the Q10 combined; we believe that production has persisted at roughly 1.5 million to 2 million BB10 units per month through the end of May.

JUNE 6, 2013 8:06 P.M.

Truth in the news wrote:

Why is that Tiernan Ray spends some much effort defending the statements of a party he wrote a "news" article about. Why does the "reporter" need to go to such lengths to protect what the source of his 'news report" said? That is very very odd.

Do the other reporters ( sorry it should read "real news reporters") come back to requote and support the statements made by the parties they write about, no they don't. They just report the news and present the facts to the readers. But that not what happens here. raises serious question to the facts, the intent and parties involved.

It seems more like they are in cohots with the fabrication of misleading and deflamitory statments. Shame on you Barrons, you used to be a respected news source. Now what are you?

I am sure anything that gives question to the credibility of the author of this fictional piece will be deleted so I will also post this on the Barron site direct as well as thorugh other web feeds.

JUNE 6, 2013 8:11 P.M.

Truth in the news wrote:

By the way I notice you allow the posting of offensive and rude attackes against Blackberry to be posted but any polite and professionally written comment that draw question to the credibility of the author and Barrons gets deleted.

Clear intent stands out by actions.

JUNE 6, 2013 10:21 P.M.

Anonymous wrote:

Tiernan,

You stated the following in your reply to Kurt Windibank -- "Like a lot of analysts, Faucette is publishing frequently where he thinks there is a lack of information, hoping for an edge in gauging the stock."

It could easily be true that Faucette is issuing his frequent bearish views on BBRY just to be published more frequently in your column in Barrons, thus making his bearish views have more effect, as you seem to very accommodating to him in quoting his views, and much more frequently than any other analyst. As is said, "the squeaky wheel gets the grease," in this case by publicizing his frequent bearish views on BBRY by having them published in your widely read column.

It could be a truism, but I do believe that the effect of a bearish article on a stock drives it down more than a bullish one drives it up. It also would also seem to follow that a stock will be driven down more to the extent that there are more bearish articles than bullish ones.

I hope you try to be fair in trying to publish close to as many bullish articles, or at least comments, about a stock as bearish ones about it, and do not change that formula on the basis that one bearish analyst seems to be much more prolific in coming up with new bearish comments than do his bullish counterparts. Most of your readers seem to BBRY investors and they have to suffer their investments going down when you are one-sided in favor of publishing the views of bearish analysts, views which I believe that make very good comments about their being wrong, unsupportable, along with their arguments that a good journalist would occasional provide some context to his readers regarding the analyst's statements by providing some personal opinion as to the analyst's track record in being correct with regard to his prior views.

I do note that you at least took a baby step in providing some food for thought as to the quality of the analyst being cited (i.e. Faucette) with your opening "he's at it again" and by putting quotation marks around his use of the word "check." But, to be a top journalist, I think you could add some more of your journalistic opinion, including skepticism, to your comments to make your column better, which would undoubtedly lead to it being more widely read..

JUNE 6, 2013 10:42 P.M.

Tiernan Ray wrote:

Anonymous: I publish reports as I find them, the good, the bad, and the ugly. With stocks that have more Street negative views than positives, you may find that the general wave of coverage comes up being negative more than positive, because that reflects the odds in such a climate.

JUNE 6, 2013 10:47 P.M.

Tiernan Ray wrote:

Munx: Faucette had focused on sell through in a note on March 26th, as I pointed out in a prior comment here. So it's not true that he switched to using sell through on May 31st. That may not matter much, it's just a detail. As for company analysis of sell through, I certainly don't know that it's impossible for the company to nail down, as you suggest. There are likely many factors to be taken into account. The company provided a sell through figure in total for the February quarter of 7.5 million when they reported on March 28th. It's certainly conceivable that they have somewhere in their database a record of how many of those units were BB10 units. But they are entitled to choose what they disclose and their may be good reasons not to detail such information. BlackBerry would certainly not be the first company to choose not to break out such information. Many, many companies choose not to do so. In the breach, analysts will conjecture, both bull and bear.

JUNE 7, 2013 6:35 A.M.

freddysrevng wrote:

Fans! Fans!

GNAA is where you'll find me. I'm their new analyst. Drop by. Ask us anything. That's GNAA! We're back and so is BlackBerry! Definitely not your average or ordinary Berry. You can say that again. GNAA.

We endorse the Q in Q10 and Q 5!

JUNE 7, 2013 7:55 A.M.

Nick D. wrote:

Was watching BNN interview with James B. C. Doak yesterday, he made interesting point, that Pac Crest switching interest from BBRY cash reserves, which should depleted by now, according PC earlier report, to sales numbers of device which is not available yet. Cash is still there by the way.
Plus he recommended them to do proof reading before they publish their reports to make it more credible. I guess Tiernan Ray do that for PC.
With 130 mill shares shorted and BBRY doing just fine, we are may be looking on another "London Whale" if stock will go to 22-23 dollars.

JUNE 7, 2013 8:48 A.M.

dave wrote:

Just as I suspected this is due to lack of innovation

JUNE 8, 2013 6:47 A.M.

Anonymous wrote:

This stock will never ever see $20. Never.

JUNE 8, 2013 8:54 A.M.

Nick D. wrote:

@Anonymous, will see after earnings.

JUNE 9, 2013 5:23 A.M.

@ Nick wrote:

Q: After the D is there an E? And as N is to K is D to N? Just wondering. That you?

As for earnings. And pps. How is value determined. Depends. Comes down to several very simple things. And re those simple things. BBRY is rather powerless and remains so. So who holds the reins to power?

MUA HAHAHAHAHAAAAAA AHAHA HA!
:-P

JUNE 10, 2013 8:45 A.M.

Nick D. wrote:

@Anonymous, you response sounds nervous,do you have something substantial besides 'MUA HAHAHAHAHAAAAAA AHAHA HA' ? Otherwise see you at $22, on June 23.

I see in today's Globe+Mail. Wow. The CBC's talk show host and ex tv music video dj George Stroumboulopoulos has flopped with his new CNN Sunday talk show. Only 192,000 viewers. 78,000 viewers in the 24-54 year old age group. Could have told you he would bomb. Party line obsequious sycophantic pandering fellating Canadians are not penetrating journalists even if the CBC tries to "make" them by sending them to Haiti etc. Maybe after he's sent back up north. He can enter politics like Wallin and Duffy. Or he can pump and shill for BCE's mental health propaganda machine. What's left? Beyond pretending.

JUNE 13, 2013 7:17 A.M.

Frank Cout wrote:

@Tiernan Ray I wonder if you will be reporting the 2 notches UPGRADE on BBRY today ?
SocGen Upgrades BlackBerry (BBRY) Two Notches to Buy
Societe Generale upgraded BlackBerry (NASDAQ: BBRY) two notches from Sell to Buy.

For an analyst ratings summary and ratings history on BlackBerry click here. For more ratings news on BlackBerry click here.

Shares of BlackBerry closed at $13.56 yesterday, with a 52 week range of $12.55-$17.22.

JUNE 13, 2013 10:03 A.M.

@ Hey Frankie wrote:

Where's the link dude? Eh. Sheesh. Might as well say anything like that. Huh. That you?

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.